A directory tree is a semi-graphic representation of a folder and sub-fodder structure where the folder and it's sub-folders and their sub-folders are represented as a nested list... That is the sub-folders are listed indented from the folder or sub- folder in which they reside and you can navigate in the whole structure by clicking on any folder or sub-folder on this list. Windows provides directory tree navigation in the navigation pane of windows explorer.

My understanding is that Kindle has a "flat" directory structure so it gives only a list of collections with no nesting or sub-collections and you can create "collections" and add books to them one-by-one using the Kindle interface.

These collections are essentially index documents which link to the collected books and that list along with all the book files on the device. It is like these collections are like a small book 'table of contents' that links to other books rather than to chapters within it.

I believe that you can put folders of ebooks on the device via USB but the contents are represented on the device as a flat list of all books in all folders but that the third party application Kindle Collection Manager can be used to create a flat un-nested set of "collections" based on the folders you have placed on the device.

I also believe that the Calibre ebook management software can make such "collections" of links to books but Kindle interprets these Calibre collections as conventional books and doesn't privilege them in the collections listing.